Serbia, Republic of

The Republic of Serbia, a candidate country for accession to the European Union (EU), introduced revised legislation in 2019 to strengthen its accounting, auditing, and financial reporting framework and further align it with relevant EU Directives.

Under the Law on Accounting of 2019, the Ministry of Finance (MoF) is responsible for establishing the financial reporting framework in the jurisdiction, including the adoption and promulgation of applicable accounting standards. The Ministry has adopted International Financial Reporting Standards (IFRS) and the IFRS for Small and Medium-sized Entities (IFRS for SMEs) as issued by the International Accounting Standards Board (IASB) and translated into Serbian.

The law requires the application of IFRS for the preparation of separate and consolidated financial statements of large entities, public interest entities (PIEs) as defined in the law, legal entities designated as PIEs by the government regardless of size, and public companies established under the Capital Markets Law. Large entities are defined as those meeting two of the following three criteria: average total assets exceeding €17.5 million, operating income exceeding €35 million, and an average number of employees greater than 250.

Small and medium-sized entities are required to apply IFRS for SMEs, although medium-sized entities may elect to apply full IFRS. Small entities are defined as those meeting two of the following three criteria: average total assets between €350,000 and €4.4 million, operating income between €700,000 and €8.8 million, and an average number of employees between 10 and 50. Medium-sized entities are defined as those meeting two of the following three criteria: average total assets between €4.4 million and €17.5 million, operating income between €8.8 million and €35 million, and an average number of employees between 50 and 250.

Micro entities may apply either IFRS for SMEs or the requirements set out in the National Rulebook for Accounting and Financial Reporting for the preparation of statutory financial statements. Micro entities are those meeting two of the following three criteria: average total assets below €350,000, operating income below €700,000, and an average number of employees below 10.

Under the Law on Auditing of 2019, the statutory audit framework was further strengthened through the establishment of the Audit Public Oversight Board (APOB) and the clarification of the scope of mandatory audits. Statutory audits are required for all large and medium-sized entities, financial institutions, public entities established under the Capital Markets Law, and sole proprietors generating income in excess of €4.4 million in the previous financial year.

Mandatory membership in the Chamber of Authorized Auditors of Serbia (KoR) is required for all statutory auditors and audit firms. Auditor rotation is required after seven consecutive years for individual auditors. Audits must be conducted in accordance with International Standards on Auditing (ISA) as issued by the International Auditing and Assurance Standards Board (IAASB), translated into Serbian, and promulgated by the Ministry of Finance.

Only statutory auditors are regulated in Serbia at the state level under the Law on Auditing of 2013, as amended in 2019. The profession is regulated through a shared framework involving the Chamber of Authorized Auditors of Serbia (KoR) under the oversight of the Ministry of Finance (MoF) and the Audit Public Oversight Board (APOB).

To practice as a statutory auditor, an individual must obtain a bachelor’s degree, complete at least three years of practical experience in an audit firm, complete the professional education program administered by KoR, pass KoR’s professional examination, and obtain a license from the MoF. Membership in KoR is mandatory for all practicing statutory auditors and audit firms.

Under the law, KoR is responsible for maintaining the registers of certified statutory auditors, audit firms, and independent auditors; organizing and implementing the quality assurance (QA) review system; arranging and delivering continuing professional development for statutory auditors together with other authorized providers; managing and conducting professional examinations for certification; and monitoring compliance with the applicable ethical requirements. The MoF, APOB, and KoR share responsibility for the investigative and disciplinary framework applicable to auditors.

APOB was established under the Law on Auditing with a mandate to oversee KoR, audit firms, independent advisers, and licensed statutory auditors. Its responsibilities include oversight of professional examination arrangements, continuing professional development requirements, the granting, renewal, and withdrawal of licenses for statutory auditors and audit firms, the application of ethical and professional standards, the QA review system, and the implementation of the investigative and disciplinary system.

Further, effective from 2020 under the Law on Auditing of 2019, the Securities Commission is responsible for the implementation of the QA review system for statutory audits of financial statements performed by audit firms. The Securities Commission also reviews KoR’s QA review findings.

Other accountancy professionals may voluntarily join the Serbian Association of Accountants and Auditors (SAAA) and be subject to its self-regulatory framework. SAAA comprises both accountants and auditors and regulates its members by requiring adherence to the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA); developing and delivering professional education, examination, certification, and continuing professional development programs; monitoring members’ performance through a QA review system; and enforcing adherence to professional standards.

SAAA offers qualifications of Accountant, Certified Accountant, and Certified Public Accountant. These programs benefit from mutual recognition arrangements with professional accountancy organizations in the region and exemptions from the Association of Chartered Certified Accountants (ACCA) qualification program.

The Audit Public Oversight Board (APOB), established in 2013 under the Law on Auditing of 2013, is responsible for the oversight of the activities of the Chamber of Authorized Auditors of Serbia (KoR), audit firms, independent advisers, and licensed statutory auditors.

The main functions of APOB include oversight of the professional examination arrangements for the certification of auditors; the establishment and implementation of continuing professional development requirements for auditors; the granting, renewal, and withdrawal of licenses for statutory auditors and audit firms; the application of ethical and professional standards; the quality assurance review system; and the implementation of the investigative and disciplinary system.

APOB is not a member of the International Forum of Independent Audit Regulators (IFIAR).

The Chamber of Authorized Auditors of Serbia (KoR)

The Chamber of Authorized Auditors of Serbia (KoR) was established in 2006 under the Law on Accounting and Auditing of 2006 as a mandatory membership organization for certified auditors, certified internal auditors, and audit firms, subject to the oversight of the Ministry of Finance (MoF). In accordance with the 2006 law and its subsequent amendments, the chamber’s main objectives are to support the development of the accounting and auditing profession, promote the implementation of international accounting, auditing, and ethical standards, represent and advocate on behalf of the profession, and administer professional examinations for auditors.

With the promulgation of the Law on Auditing of 2013, membership in KoR became mandatory for all licensed statutory auditors and audit firms. In addition, KoR’s responsibilities were expanded to include the administration and delivery of continuing professional development programs for auditors, together with other authorized providers, and the implementation of a mandatory quality assurance review system for statutory audits in Serbia.

KoR is an Associate of IFAC.

The Serbian Association of Accountants and Auditors (SAAA)

The Serbian Association of Accountants and Auditors (SAAA) was established in 1955 and comprises primarily accountants and some auditors who join the association on a voluntary basis. SAAA has played an important role in the Serbian translation and dissemination of international standards, including International Financial Reporting Standards (IFRS), IFRS for Small and Medium-sized Entities (IFRS for SMEs), International Standards on Auditing (ISA), International Public Sector Accounting Standards (IPSAS), and the International Code of Ethics for Professional Accountants (including International Independence Standards).

The association’s main objectives are to strengthen the role of the accountancy profession in Serbia; promote ethical behavior and adherence by its members to the Code; develop and deliver professional education, examination, certification, and continuing professional development programs in line with the International Education Standards (IES); monitor members’ professional conduct and adherence to standards; represent Serbian professional accountants internationally; and promote cooperation among national professional accountancy organizations.

SAAA is a Member of IFAC and Accountancy Europe.

In accordance with the Law on Auditing of 2019, audit firms are required to establish and maintain a system of quality control in line with International Standard on Quality Control 1 (ISQC 1). Effective from 2020, the Securities Commission is responsible for the implementation of the quality assurance (QA) review system for statutory audits of financial statements performed by audit firms. Audit firms providing services to public interest entities are subject to a three-year inspection cycle, while other audit firms are reviewed every six years.

The Chamber of Authorized Auditors of Serbia (KoR) also continues to be tasked by law with carrying out QA reviews for its members, which include all statutory auditors and audit firms in the jurisdiction. The QA review system operated by KoR is subject to the oversight of the Securities Commission, the Audit Public Oversight Board (APOB), and the Ministry of Finance (MoF). The MoF retains final authority to approve QA review reports prepared by KoR inspectors, which are submitted to APOB for review and subsequently forwarded to the MoF. Based on proposals submitted by KoR and cleared by APOB, the MoF issues decrees for appropriate corrective and disciplinary measures. The Securities Commission also reviews KoR’s QA review findings.

KoR reports that the established QA review system is operational and broadly aligned with the requirements of SMO 1. However, the International Standards on Quality Management (ISQM 1 and ISQM 2) and ISA 220 (Revised) have not yet been legally adopted and made effective in the jurisdiction. Accordingly, the jurisdiction continues to be assessed as Partially Adopted.

Current Status: Partially Adopted

The initial professional development and continuing professional development (CPD) requirements established in Serbia are defined primarily for statutory auditors under the Law on Auditing of 2019 and are implemented through universities and the Chamber of Authorized Auditors of Serbia (KoR) under the oversight of the Audit Public Oversight Board (APOB) and the Ministry of Finance (MoF).

To qualify as a statutory auditor, an individual must obtain a bachelor’s degree, complete at least three years of practical experience in an audit firm, complete the professional education program administered by KoR, pass KoR’s professional examination, obtain a license from the MoF, and fulfill mandatory CPD requirements.

Universities are responsible for defining the university-level accounting curricula. According to the World Bank Accountancy Education Benchmarking Study, the university education framework demonstrates broad alignment with the International Education Standards (IES) applicable to initial professional development.

KoR administers the professional education program for statutory auditors, conducts examinations of prospective auditors, and delivers a mandatory CPD program. KoR reports that it continues to review and update its curriculum and examinations to reflect the latest IES requirements and competency-based learning approaches. The CPD requirements are aligned with IES 7, requiring 120 hours over a three-year rolling period.

The Serbian Association of Accountants and Auditors (SAAA), which brings together accountants and auditors on a voluntary basis, offers the qualifications of Accountant, Certified Accountant, and Certified Public Accountant, based in part on the Association of Chartered Certified Accountants (ACCA) qualification framework. SAAA has established requirements for final assessment, practical experience, and continuing professional development for its members. The CPD requirements are likewise aligned with the IES 7 input-based approach of 120 hours over three years.

While significant elements of the IES framework are in place for both auditors and accountants, the requirements are not demonstrably adopted and effective for all aspiring and professional accountants in the jurisdiction in line with the latest IES in effect as of the time of the assessment, particularly in relation to updated learning outcomes requirements and engagement partner competencies. The jurisdiction continues to be assessed as Partially Adopted.

Current Status: Partially Adopted

The Law on Auditing of 2019 requires the application of International Standards on Auditing (ISA) for the performance of statutory audits in Serbia, as translated into Serbian and promulgated by the Ministry of Finance (MoF).

As of the latest publicly available information, the 2016–2017 International Auditing and Assurance Standards Board (IAASB) Handbook remains the version formally promulgated by the MoF for application in the jurisdiction.

The Serbian Association of Accountants and Auditors (SAAA) is responsible for the translation of auditing standards in line with IFAC’s Translation Policy and has translated several versions of the IAASB Handbook over the years.

While the Chamber of Authorized Auditors of Serbia (KoR) reports that, in practice, audits of public interest entities may apply more recent standards, the standards formally adopted at the jurisdiction level remain a pre-2018 version of ISA. In accordance with the revised 2026 adoption definitions, the jurisdiction is therefore assessed as Not Adopted.

Current Status: Not Adopted

The Law on Auditing of 2019 requires statutory auditors to comply with a Code of Ethics adopted by the Chamber of Authorized Auditors of Serbia (KoR). KoR has adopted, without modification, the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA).

Statutory auditors and members of the Serbian Association of Accountants and Auditors (SAAA), which includes accountants and auditors on a voluntary basis, are subject to ethical requirements.

SAAA is responsible for the translation of the Code and, as of the latest publicly available information, the 2018 version of the IESBA Code has been translated into Serbian and is being applied in the jurisdiction by members of both professional accountancy organizations.

While the 2018 Code remains in force, subsequent revisions reflected in later IESBA Handbooks, including the 2023 edition and later updates, have not yet been formally translated and adopted for application in the jurisdiction. Accordingly, the jurisdiction continues to be assessed as Partially Adopted.

Current Status: Partially Adopted

The Ministry of Finance (MoF) is responsible for establishing public sector accounting standards in Serbia.

According to the Serbian Association of Accountants and Auditors (SAAA) and corroborated by the IFAC/CIPFA International Public Sector Financial Accountability Index and the World Bank Centre for Financial Reporting Reform (CFRR) PULSAR reports, cash-basis International Public Sector Accounting Standards (IPSAS) were adopted in Serbia through government decision and continue to be applied by public sector entities. Serbia remains engaged in a phased reform process toward accrual-based IPSAS, with transition plans extending through 2030.

The ongoing reform agenda and implementation roadmap are also reflected in the World Bank/CFRR Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries: Serbia and the Book on Public Sector Accounting Reforms Implementation Status in PULSAR Countries, which note continued progress toward accrual accounting in the public sector.

As cash-basis IPSAS remain the applicable framework at the jurisdiction level, and accrual-based IPSAS have not yet been fully adopted and made effective for all public sector entities, the jurisdiction continues to be assessed as Partially Adopted.

Current Status: Partially Adopted

Under the Law on Auditing of 2019, the investigative and disciplinary (I&D) framework for statutory auditors, the only formally regulated category of professional accountants in Serbia, is operated through a shared system involving the Chamber of Authorized Auditors of Serbia (KoR), the Ministry of Finance (MoF), and the Audit Public Oversight Board (APOB).

The law requires KoR to notify APOB, the MoF, the Police, the Public Prosecutor, and the Ministry of Justice where its members are involved in crimes or other offenses. KoR has established an Investigation and Discipline Committee responsible for conducting investigations and making disciplinary recommendations to the Council for approval. The MoF retains final authority to impose corrective and disciplinary measures on licensed statutory auditors and audit firms.

KoR reports that the committees are composed solely of KoR members. As such, the framework does not fully align with SMO 6 best practice requirements, particularly with respect to the participation of non-professionals and broader public interest representation in the disciplinary process.

Accountants are self-regulated through voluntary membership in the Serbian Association of Accountants and Auditors (SAAA), which reports that it has established an I&D framework incorporating the requirements of SMO 6 to address non-compliance by its members with applicable laws, regulations, and the International Code of Ethics for Professional Accountants (including International Independence Standards). Accordingly, the jurisdiction continues to be assessed as Partially Adopted.

Current Status: Partially Adopted

The Ministry of Finance (MoF) is responsible for the adoption and promulgation of accounting standards in the Republic of Serbia in accordance with the Law on Accounting of 2019.

The MoF has adopted International Financial Reporting Standards (IFRS), as translated into Serbian, for the preparation of the financial statements of large entities and public interest entities (PIEs) as defined in the law. It has also adopted IFRS for Small and Medium-sized Entities (IFRS for SMEs) for application by small and medium-sized entities, while medium-sized entities may elect to apply full IFRS. Micro entities may choose to apply IFRS for SMEs or the requirements of the National Rulebook for Accounting and Financial Reporting.

IFRS and IFRS for SMEs become effective upon publication in the Official Gazette.

The Serbian Association of Accountants and Auditors (SAAA) has translated the 2019 version of IFRS and the 2015 version of IFRS for SMEs into Serbian, although the MoF retains legal responsibility for promulgation. According to the latest publicly available information, subsequent editions and amendments to IFRS have not yet been formally translated and published at the jurisdiction level.

While the Chamber of Authorized Auditors of Serbia (KoR) reports that, in practice, financial statements of public interest entities may apply later versions of IFRS, the standards formally adopted and effective in the jurisdiction do not yet reflect the IFRS Accounting Standards in effect as of the time of the assessment for all domestic publicly accountable entities. Accordingly, the jurisdiction continues to be assessed as Partially Adopted.

Current Status: Partially Adopted

Relevant Organizations

• Chamber of Authorized Auditors of Serbia (KoR)
• Republic of Serbia Ministry of Finance (MoF)
• Republic of Serbia Securities Commission: Audit Public Oversight Board (APOB)
• Serbian Association of Accountants and Auditors (SAAA)
• World Bank Centre for Financial Reporting Reform (CFRR) / PULSAR

Relevant Legislation

• HYPERLINK "https://www.paragraf.rs/propisi/law-on-accounting-republic-of-serbia.html"Law on Accounting 2019
• Law on Auditing 2019 (as amended)
• HYPERLINK "https://www.nbs.rs/export/sites/NBS_site/documents-eng/propisi/zakoni/law_banks.pdf"Law on Banks, 2005
• HYPERLINK "https://mfin.gov.rs/upload/media/oGqdqN_62d66755a7ad7.pdf"Law on Capital Markets, 2011

Relevant Publications

• Accountancy Europe, Overview of the Profession in Serbia, July 2020.
• IFRS Foundation, “IFRS Application Around the World, Jurisdictional Profile: Serbia,” February 2017.
• KoR, Organizational Profile & SMO Action Plan, 2021.
• SAAA, Organizational Profile & SMO Action Plan, 2021.
• World Bank, Accountancy Education: Benchmarking Study, 2017.
• World Bank, Accountancy Education: A Collection of Good Practices, 2017.
• World Bank, Serbia: Report on the Observance of Standards and Codes (ROSC), Accounting & Auditing, 2015.
• World Bank, Stocktaking of Public Sector Accounting and Reporting Environment in PULSAR Beneficiary Countries: Serbia, 2020.
• World Bank, Book on Public Sector Accounting Reforms Implementation Status in PULSAR Countries, 2022.